FROSTY FUTURES APR. 4, 2003

TECH DATA FOR FRIDAY

DOW R=8340; 8385; 8476; 8522. S=8220; 8200; 8100; 8025.

SPX R=886; 893; 896; 908. S=874; 862; 849.

NDX R=1079; 1084; 1090; 1100. S=1057; 1045; 1032; 1015.

JUN TBOND R=11124; 11204; 11214. S=11106; 11030; 11010.

JUN GOLD R=328; 333; 338; 341. S=324; 322; 320.

MAY SILVER R=448; 450; 458. S=438; 436; 425.

JUN DOLLAR R=101.10; 101.60; 102.10. S=100.65; 99.80; 99.20.

JUN CRUDE R=2765; 2800; 2850; 2950. S=2680; 2610; 2535.

JULY BEANS R=588; 592; 597. S=581; 577; 573; 565.

MAY WHEAT= 289; 298; 304. S=280; 278; 272.

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INDICES

I can only hope to tell you the reasons behind the action this week. As far as the technical action is concerned, it’s day to day, hour to hour, minute to minute. There is simply nothing more to be said that is meaningful. You all know the rhetoric, the fact that our troops are closing on major cities in Iraq, Korea is getting worse, our President, God love him, is not a very good speaker and who knows what-all else. I could give you a whole list of "if-then’s" but the fact of the matter is I prefer to let others do that. If I don’t know what is going on, my tendency is to keep my fingers still. The market will give us a pattern from which to make decisions and when they are presented I will let you know. You would be well served to follow the charts as closely as you can.

INTEREST RATES

Resistance on the June Tbond, near the 11214 level, is important. If that level is penetrated (and closes above that) a real indication of more discounting of a bad economic environment is being presented. On the other hand, if the market stops there and goes down, we should expect traders to infer higher rates and all that implies, higher gold, higher crude, etc.

METALS

Gold may test 320 tomorrow (Friday). If it holds a bottom may be in place. It would be nice for price to test 315 and provoke a key reversal, but as we know, the market rarely does what we project relative to reversals. Nonetheless, it is a possibility. Notice silver held pretty well today in the face of gold’s weakness. Copper remains on track to test 7000 and before too long, at that.

CURRENCY

Please note that the Dollar Index daily chart has an island reversal pattern from the first two weeks of March. Notice also the attempts Monday, Tuesday and Wednesday failed to close that gap. That is what propelled the short-covering rally. Let the dust settle. Another attempt to fill the gap will "probably" take place, but the formation is a strong bullish signal. If America’s military might can be matched by economic flexibility the buck will gather more strength. Multiple objectives muddy the water in the crystal ball.

CATTLE

A rally underway now is an opportunity to sell summer contracts (June, if not July) in anticipation of the summer doldrums. It is worth noting that even though total numbers are down from last year they are still high and total red meat production is up, again, in spite of lower numbers in the herd. June might get as high as 7300 and I expect to see this contract below 7000 before they go off the board and the likelihood of the upper 6000’s in quite likely.

ENERGY

All I can tell you is to compare the crude chart to the Tbond chart. Unsettling in their similarity.

GRAIN

I read that trucks coming out of the fields in Brazil were in lines that are 70 miles long. No place for them to unload keeps the supply from hitting the market. Believe me, the beans will hit the market. If a spring rally takes July beans into the 600-650 area get ready to sell them. Based on the chart formation 650 is a legitimate target if you want to play from the long side. Corn was held within the 100-day moving average. But that won’t matter if beans start some fireworks. Some of you may want to try the wheat-corn spread. At 45-cents it’s pretty cheap. That same group may want to try the corn-oat spread this year. Oats near 190 are not cheap by any stretch. But note the July contract is already heavily discounted.

SOFTS

Cocoa is drifting, which I infer to mean that it will drift lower. Given the current envelope there is a downside target on the July contract at 1750. A close in coffee above 6500 should stimulate traders to buy into overhead resistance near the 100-day MA at the 6800 area. Keep in mind that as our weather warms up the Colombian Mountains get colder day by day. Sugar remains under the influence of the island reversal top. I read somewhere an analyst called a recent formation a "double-bottom." I disagree. Recent action in cotton is interesting. A bullish engulfing line bottom off a perfect double top was enough to propel the market into a 50% retracement of the recent decline. But consolidation warns of loss of momentum. I lean toward the importance of the double top rather than in the bullish engulfing line. I will be proven wrong if the contract can exceed the .618 retracement level, basis July, just at yesterday and today’s highs. Oh yea faithful don’t give up on your OJ. The base is in, the rally has begun and now we will actually see how much damage was done to the Orange crop last winter. My guess is the reaction highs near 9800 will be taken out. Lumber has begun a recovery. World supplies may be shifted from normal patterns and stimulate strong summer prices.

CONTACT ME: williamfrost@comcast.net or www.frostyfutures.com.

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Trading futures is for individuals willing to assume greater risk for the opportunity of greater rewards. Only speculative capital should be used. Past performance is no assurance of future profits. Information contained herein is believed reliable but original sources of data have not been independently verified therefore is not guaranteed. Ideas and suggestions are the opinion of the writer and are subject to change at any time. Nothing herein should be construed to be a solicitation to trade futures or options. Hedgers should have a defined plan.